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News
7/27/2010
Press Release - New Jersey's Seniors Will Pay Steep Price for Medicare's
CONTACTS:
Wendy Russalesi, 732-503-5665, Jersey Assn. of Medical Equipment Services, wrussalesi@jamesofnj.org;
Michael Reinemer, 703-535-1881, American Assn. for Homecare, michaelr@aahomecare.org.
New Jersey’s Seniors Will Pay Steep Price for Medicare’s
“Competitive” Bidding Program for Home Medical Equipment
JACKSON, NJ, July 27, 2010 ------ Seniors and people with disabilities who rely on home medical equipment and services in New Jersey will pay a steep price under Medicare’s controversial and mislabeled “competitive” bidding program for durable medical equipment. With the recent passage of the health reform bill, this program is now slated to encompass 80 percent of New Jersey during the second round of bidding.
The U.S. Department of Health and Human Services announced recently that bidding in nine of the country’s largest metropolitan areas could save Medicare as much as $17 billion over 10 years for home medical equipment and services. But those alleged savings are the result of “suicide bids” from providers in an ill-advised race to the bottom that will put thousands of homecare providers out of business and reduce patients’ access to care. Recognizing that the program is bad healthcare policy, a bipartisan group of 254 lawmakers in the House of Representatives support legislation that would repeal the bidding program but preserve the projected cost savings for Medicare.
“New Jersey’s Medicare population should be gravely concerned about this bidding program,” says Wendy Russalesi, executive director of the Jersey Association of Medical Equipment Services (JAMES), which represents providers of home medical equipment in the state. “This program will do nothing more than delay access to necessary medical equipment, reduce the quality of the medical equipment provided, and place additional economic strain on the small business community of New Jersey.”
The Medicare bidding program uses economic coercion to force homecare providers to submit unsustainable bids necessary to win a contract. Because Medicare is the largest third-party purchaser of home medical care, its market power effectively coerces providers to bid at unsustainable reimbursement rates to ensure the opportunity to continue serving Medicare beneficiaries. Ultimately, the below-market rates achieved through this bidding program will force thousands of businesses to close, reducing competition in the long term and reducing seniors’ access to care and choice of providers.
Congress delayed the implementation of this bidding program in 2008 to allow for needed changes, and the home medical equipment sector paid for that delay by taking a 9.5 percent nationwide reimbursement cut to pay for the projected savings from the initial round of the program. However, the Centers for Medicare and Medicaid Services (CMS) ignored congressional intent, did not address the flaws that precipitated the delay two years ago, and is now recklessly charging forward with the program in nine of the 10 largest metropolitan statistical areas in the U.S. An additional 91 areas will be subjected to the bidding process next year.
“CMS is working on the flawed concept that this will save the money for beneficiaries and CMS,” said Dr. Kevin Saluck, vice president of clinical operations at Sayreville, N.J.-based Allcare Medical, and president of JAMES. “This will prove to be untrue as the average length of stay in hospitals will inevitably increase, as will hospital readmissions, thanks to problems caused by a decrease in the number of home medical equipment suppliers. Patients and families don’t want longer hospital stays, and our Medicare system can’t afford them.”
“There is so much more to taking care of Medicare beneficiaries than the price of the item,” added Raymond Arthurs, owner of First Care Medical Supplies in Manalapan, and Vice President of JAMES. “We all know these extensive service, overhead and compliance expenses very well – and so does CMS – but they fail to recognize them even though they created many of these costs themselves.”
A broad group of 254 members of the House of Representatives has cosponsored legislation in Congress, H.R. 3790, to stop the bidding program and replace it with a fiscally responsible measure to reduce payment rates for homecare but preserve the ability of home medical providers to continue serving Medicare beneficiaries. New Jersey Representatives who have cosponsored the bill include Robert Andrews (D), Rodney Frelinghuysen (R), Leonard Lance (R), Frank LoBiondo (R), Donald Payne (D), Steven Rothman (D), Albio Sires (D), and Chris Smith (R).
Other organizations that support the elimination of Medicare’s bidding program for home medical equipment include the ALS Association, the American Association for Respiratory Care, the American Association of People with Disabilities, International Ventilator Users Network, the Muscular Dystrophy Association, National Emphysema/COPD Association, National Spinal Cord Injury Association, Post-Polio Health International, and United Spinal Association, among others.
Unintended negative consequences of the bidding program include:
- REDUCED ACCESS TO CARE AND SERVICE DISRUPTION – This bidding program will restrict consumer access to care and choice for home medical items and services, and it will trigger a race to the bottom in terms of quality. Less expensive items will be provided to patients. The program will disrupt the continuum and coordination of care between doctors, discharge planners, patients, and home medical equipment providers. With a loss of providers, expedient deliveries of items and services will be eliminated.
- HIGHER SPENDING IN MEDICARE – The bidding program will increase Medicare costs. It will lead to longer, more expensive hospital stays and more physician office visits, nursing home admissions, and emergency room visits.
- LESS COMPETITION, NOT MORE – The bid program is anti-competitive because it reduces the number of competitors. About 90 percent of home medical service providers would have been barred from the Medicare program in the first round of bidding conducted in 2008.
- LOSS OF JOBS AND SMALL BUSINESSES – The bidding program will result in the closing of thousands of small businesses and result in as many as 100,000 job losses nationwide.
The Jersey Association of Medical Equipment Services (JAMES), established in 1978, disseminates information related to the delivery of Home Medical Equipment to providers of these services. It is the goal of the organization to keep its members informed of industry changes and related information necessary to maintain quality of care in providing home medical equipment, supplies and services to the patients who rely on home medical equipment. JAMES membership is comprised of more than 70 members and manufacturers doing business in the state of New Jersey. Visit www.jamesofnj.org or call 732-503-5665.
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